Apple reportedly signed a $1.5 billion, 5-year deal with Amazon's cloud

Getty/Drew AngererAmazon CEO Jeff Bezos.

Apple recently signed a deal to spend at least $US1.5 billion over the next five years with Amazon Web Services, the retailer’s market-leading cloud-computing platform, according to a new report from CNBC.

The deal reflects the iPhone maker’s increased reliance on Amazon’s cloud: According to the report, Apple spent an average of over $US30 million on AWS every month during the first quarter of this year – a gain of more than 10% from the same period in 2018, the report says.

If these conditions hold, it puts Apple on track to spend in excess of $US360 million on AWS this year, which would be up from the $US350 million that CNBC reports it spent in 2018. That five-year deal seems to indicate that Apple intends to maintain its investment in AWS: If Apple is already spending over $US360 million every year, it will easily surpass the $US1.5 billion minimum mandated by that five-year deal.

As the report notes, Apple has said in the past that it uses Amazon Web Services for iCloud storage, though it hasn’t given more specifics or said if it uses the platform for any other purpose. It’s been previously reported as well that Apple uses at least some cloud services from Google, and it’s been known to use Microsoft technology as well.

But Apple is hard at work building its own cloud infrastructure, investing billions in new data centres that would increase its ability to deliver internet services without relying as much on frenemies like Amazon or Google.

Apple and Amazon did not respond to Business Insider’s request for comment at the time of publication.

For some points of comparison, Pinterest disclosed in its IPO filing that it’s spent $US309 million with Amazon Web Services since 2017, while Lyft has told investors that it’s committed to spending $US300 million with AWS by the end of 2021. In that light, it’s clear that Apple is definitely a major AWS customer, with these figures putting its spending well ahead even of companies that were born in the era of cloud computing.

Read more: Lyft has to pay Amazon’s cloud at least $US8 million a month until the end of 2021

It also highlights how the cloud-computing market has a way of turning competitors into customers. It’s become increasingly difficult for even giants like Apple to launch and maintain large-scale internet services without the help of dedicated cloud platforms from the likes of Amazon, Microsoft, or Google.

It means that while Apple might be competing with Amazon with services for music, movies, and cloud services, it still benefits from the power of AWS to make sure its own services reach all of its customers in the way that they might expect.

Head to CNBC to read the full report.

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